XRP dropped 7.25% on Jan. 18, falling from $3.14 to $3.05 as traders responded to rumors regarding President-elect Donald Trump’s alleged plans to include the cryptocurrency in a proposed US strategic reserve.
No proof yet of Trump considering XRP
Earlier this week, XRP’s price surged by over 45%, nearing its all-time high of $3.55 (Binance), driven by a wave of bullish sentiment ahead of Donald Trump’s inauguration on Jan. 20.However, there was a rumor circulating that played a significant role in the price spike. The New York Post reported on Jan. 16 that Trump’s administration may create an “America-first strategic reserve” that would include US-based cryptocurrencies like XRP.Following this news, XRP formed a local top of around $3.40. However, the price has since fallen over 10%, including a 7.25% drop on Jan. 18. This decline is primarily attributed to the lack of confirmation regarding the New York Post claim.
Additionally, the excitement surrounding the potential XRP reserve was overshadowed by a report of a supposed fallout between Trump and Ripple over political donations to Kamala Harris. Ripple’s Chief Legal Officer, Stuart Alderoty, denied these allegations.
Over $17M in long XRP positions liquidated
The decline in XRP’s price has been accompanied by massive liquidations in the derivatives market. According to data from CoinGlass, over $17.22 million worth of long XRP positions were liquidated in the last 24 hours, while only $8.56 million worth of short positions were liquidated in the same period.When long positions are liquidated, traders are forced to sell their positions, adding further downward pressure on the price. This is similar to the $72.6 million in long liquidations that took place between Dec. 18 and Dec. 20, which contributed to a 23% price drop and set a low at $1.95.
XRP price risks another 30% drop
XRP’s current losses are compounded by signs of growing bearish divergence between rising prices and a falling relative strength index (RSI). This suggests weakening momentum behind XRP’s rally and increases the likelihood of a price reversal in the coming days or weeks.XRP is still trading well above its 50-day exponential moving average (50-day EMA), which serves as a crucial technical support level. As of Jan. 18, the 50-day EMA is positioned near $2.28, roughly 30% below XRP’s current price of $3.21. Historically, overextended price rallies often retrace toward their EMA levels, as traders take profits and market conditions stabilize. A similar scenario occurred in 2018, when a bearish divergence preceded an 80% price correction.
Conclusion
XRP’s price drop today follows a mix of speculative market conditions and a lack of confirmation regarding rumors of Trump’s plans to include the cryptocurrency in a US strategic reserve. Additionally, large-scale liquidations and technical signals suggest that XRP could face further price corrections, potentially dropping by 30% or more in the coming weeks. Traders should remain cautious as the market adjusts and waits for more concrete news or confirmation regarding XRP’s future role in any potential reserves.
FAQs
1. Why did XRP’s price drop today?
XRP’s price fell due to unconfirmed rumors about Donald Trump’s plans to include XRP in a proposed US strategic reserve. The lack of concrete evidence dampened bullish sentiment, leading to a 7.25% decline.
2. What role did liquidations play in the drop?
Over $17 million in long XRP positions were liquidated in the last 24 hours, forcing traders to sell their holdings, which added further downward pressure to the price.
3. What technical factors suggest XRP’s price may drop further?
XRP shows signs of bearish divergence between its price and the RSI, suggesting weakening momentum. Additionally, the price is significantly above its 50-day EMA of $2.28, which could act as a pullback target.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
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